“Awful news” – “completely misleading” – reaction to postponed business rates revaluation
The government last week unexpectedly announced that it would postpone the revaluation of business rates in England until 2017. The British Property Federation has condemned the move, saying it is a further blow to the country’s struggling high streets.
“The decision will lead to businesses continuing to pay business rates based on top-of-the-market 2008 rents,” the BPF said, rather than seeing them readjusted downwards in line with today’s economic situation. The BPF also feels that the decision will increase business uncertainty as there will now be concerns about “big changes” to business rates when the revaluation does take place in 2017.
Gerald Eve’s head of rating Jerry Schurder said the move was “awful news” for retailers and would not achieve the benefits claimed by the government. The government said the move would “provide certainty for business to plan and invest” and that it would mean that businesses would not face unexpected hikes in their business rates bills over the next five years. But Tim Beattie, head of rating at Jones Lang LaSalle, said this was a “completely misleading” statement, as “preliminary research from Jones Lang LaSalle suggests that ‘local firms’ and ‘local shops’ were likely to be the major beneficiaries of the next rating revaluation as their rents will have fallen further in relative terms than the average falls experienced across the wider economy.” He said the VOA’s initial work on the revaluation scheduled for 2015 would have shown the government that a significant proportion of businesses in England would see a fall in their rateable values.
Guy Grainger, head of retail at JLL, said business rates were too high in most cases as rents have come down since 2008 in most retail locations. “This is a serious headwind for retail occupiers,” he added. “The result will be two more years of hardship for the very businesses that should have benefited from the revaluation process, particularly those in our challenged high streets and the ‘local firms and shops’ referred to in the ministerial statement.”
BPF chief executive Liz Peace said that “with technological and other advances arguably we should be valuing more frequently, not less. That way, businesses are paying rates that closer reflect their circumstances.”
